We recently published a list of Top 10 Gold Stocks with Dividends. In this article, we are going to take a look at where Newmont Corporation (NYSE:NEM) stands against other top gold stocks with dividends.
Gold’s performance as an asset in 2024 has been immaculate, despite increasing global constraints. The price for it crossed the $2,900 per ounce mark, driven by strong purchasing by the central bank, increased investor demand, and its role as a hedge against economic uncertainties. Gold’s value as a safe haven increased due to inflationary concerns and increasing geopolitical instabilities, gaining interest from retail and institutional investors.
Total gold demand, including over-the-counter (OTC) investments, has reached a record high of 4,974 metric tons in 2024, as per the World Gold Council. This increase was majorly driven by central banks, which contributed over 1,000 metric tons of gold to the demand for the third consecutive year. Particularly central banks in emerging markets, such as China and India, looked to increase their gold reserves to diversify away from the U.S. dollar. Gold provided an astonishing return of 43.83% for the previous year, significantly above the broader market’s 20.89% gain for the same period.
The investment market for gold has seen major changes, where gold exchange-traded funds (ETFs) reported no major outflows for the first time since 2020, which marks a reversal from previous years of heavy liquidations. Moreover, physical demand for gold has been strong, with purchasing for bar and coins remaining stable at 1,186 metric tons. Technology-driven gold usage has also seen a surge of 7%, driven by the expansion of artificial intelligence and semiconductor industries. These industries rely on gold components for high-performance electronics.
Despite the overall strong performance of the market, gold jewelry demand saw a decrease of 11% in 2024 due to high prices, making it less affordable for consumers. Nevertheless, total spending on gold jewelry in monetary terms increased by 9%, highlighting the overall impact of increasing gold prices. The contrasting situation with lower demand for gold jewelry and high demand for investment highlights the changing role of gold in the global economy.
Market experts and top financial institutions hold a positive outlook on gold’s trajectory for 2025. Goldman Sachs has recently revised its forecast for the gold price to $3,100 per ounce, citing the enhancing accumulation by the central bank and increasing investor interest. Likewise, analysts from J.P. Morgan have projected that gold prices could increase to $3,000 per ounce if macroeconomic instability continues.
Looking ahead, the gold market is being influenced by global monetary policies as well. As per J.P Morgan, major economies like the U.S. and Europe looking to cut down interest rates and lower return on traditional investments will likely drive up the demand for gold. Historically, the opportunity cost of holding gold reduces as traditional investments produce lower yields, increasing prices.
Conclusively, under these circumstances, investment in gold stocks has become a lucrative opportunity for investors looking to gain from the metal’s performance while generating hefty returns through dividends. Gold mining companies with strong financial performance, continual dividends, and major hedge fund backing provide a golden opportunity to enter the sector.
Methodology
To come up with our list of the Best Gold Dividend Stocks to Buy Now, we first recognized companies in the gold sector, offering dividend payments, along with posing strong market capitalizations. We then shortlisted stocks by looking into hedge fund interest, as stocks with strong hedge fund backing often point to stable financials and growth potential.
To rank these stocks, we used Insider Monkey’s Hedge Fund Database as of Q4 2024. The companies were sorted on the basis of the number of hedge funds invested in them, ranking companies with the highest hedge fund interest in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A gold mine entry with a conveyor belt transporting minerals from the depths of a shaft.
Newmont Corporation (NYSE:NEM)
Number of Hedge Funds Holders: 69
Newmont Corporation (NYSE:NEM), a leading gold mining company, is engaged in the exploration and production of copper, zinc, lead, silver, and gold. Its operations span the globe, including Canada, Ghana, Australia, and the United States.
Newmont led a transformational year in 2024 as it integrated acquired assets, enhanced its portfolio, and stabilized operations. The company delivered 6.8 million ounces of gold and over 150,000 tons of copper, surpassing its production guidance, for the period ended December 31, 2024. Backed by higher sales volume and strong gold prices, free cash flow garnered $2.9 billion for the year, including a record $1.6 billion in Q4.
Moreover, Newmont Corporation (NYSE:NEM) reported 134.1 million attributable ounces at year-end 2024. The company’s progressive Tier 1 portfolio includes 125.5 million ounces of gold and considerable copper and silver reserves. While Cadia, Lihir, and Ahafo South witnessed negligible drops due to depletion and updates to pit designs, key reserve growth was seen at Boddington and Tanami. Looking ahead, Newmont’s long-term production potential was solidified by exploration efforts that made a significant addition to Brucejack, Ahafo North, and Merian.
Additionally, Newmont is making progress on its key projects, such as expansion at Cadia, Tanami, and Ahafo North. These expansions are anticipated to enhance production capacity and decrease costs in the upcoming years. The company maintains a strong position to capitalize on gold and copper market cycles with a wide-ranging portfolio across stable jurisdictions.
By distributing $2.3 billion in 2024 through dividends and share buybacks, Newmont Corporation (NYSE:NEM) reinforced its commitment to shareholder returns. While keeping $3.6 billion in cash and $7.7 billion in total liquidity, the company enhanced its balance sheet by lowering debt to below $8 billion. The company’s dedication to delivering consistent value to investors is further demonstrated through its stable $1.00 per share annual dividend.
To conclude, the stock has garnered 24.23% year-to-date, underscoring investor confidence in its performance and growth potential. Newmont remains one of the best gold stocks, with its efficient capital allocation and high-quality asset base.
Overall, NEM ranks 1st on our list of other top gold stocks with dividends. While we acknowledge the potential of NEM, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NEM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
